Fab.com CEO Signals That Job Cuts May Be Coming as Site Retools

Fab.com Inc., the e-commerce startup valued at more than $1 billion, signaled that job cuts may be coming as the company revamps its approach to selling goods and strives to turn a profit.

As of tomorrow, the company will complete a shift to an inventory-based system, Chief Executive Officer Jason Goldberg said in an e-mailed memo to employees. Fab had been relying on so-called flash sales, where a limited amount of merchandise is sold in bursts. The company also is rolling out a new website and mobile application by November, he said.

“Our processes are changing, along with our investments in technology that may impact the number of people required to perform various tasks,” Goldberg said in the memo, which directed employees to a detailed letter about the company’s strategy. “At the same time, we are accelerating our path to profitability, with a commitment to get Fab profitable on our current financing by continuously optimizing our cost structure.”

The shakeup follows a move in July to cut 100 Fab employees in Berlin. The company also shifted 30 workers from the German office to its New York headquarters, part of an effort to streamline the company. Fab said last month that no additional layoffs were in the works.